Work­place theft right un­der our noses

Winnipeg Free Press - Section H - - CAREERS - COLLEEN COATES

EV­ERY or­ga­ni­za­tion, re­gard­less of its prod­uct or ser­vice, is vul­ner­a­ble to em­ployee theft, and it has been es­ti­mated that nearly 95 per cent of all com­pa­nies have ex­pe­ri­enced some form of this ac­tiv­ity.

If that statis­tic doesn’t shock you, this one should: 20 per cent of ev­ery dol­lar earned by a com­pany is lost to em­ployee theft. In other words, it takes $1.25 in new sales to re­cover from that theft.

Work­place theft and fraud has es­ca­lated into a $600-bil­lion prob­lem in North Amer­ica, and em­ploy­ers can­not af­ford to be cav­a­lier in their at­ti­tudes. Although it’s painful to be­lieve that any of the trust­wor­thy peo­ple you’ve hired may ac­tu­ally be the ones who are dis­hon­est, it’s im­por­tant to face re­al­ity. Com­mon false assumptions about em­ployee theft in­clude:

“It had to be an out­sider. There’s no way that one of my peo­ple would do that.”

“Our em­ploy­ees are too well paid/too loyal to ever steal from us.”

“Se­nior staff would never do some­thing like that.”

“I can rely on em­ploy­ees to re­port any knowl­edge of wrong­do­ing.”

“It’s easy to spot some­one steal­ing so it would be de­tected be­fore the prob­lem es­ca­lated.”

Un­for­tu­nately, many em­ploy­ers are too fix­ated on per­ceived ex­ter­nal threats such as tough com­peti­tors or fluc­tu­at­ing mar­ket con­di­tions to re­al­ize there may be fraud­u­lent ac­tions tak­ing place right un­der their nose. Here are some ways to pre­vent theft from hap­pen­ing:

Make ethics part of your cul­ture. Man­age­ment sets the tone for an eth­i­cal work­place. Not only should man­age­ment clearly demon­strate the in­tegrity and hon­esty that it ex­pects ev­ery­one in the or­ga­ni­za­tion to up­hold, it should ex­am­ine the cul­ture to eval­u­ate where it is man­ag­ing risk well and re­in­force prin­ci­pled con­duct in ar­eas where it may be lack­ing.

Know who you’re hir­ing. One of the most proac­tive ways to fend off theft is to fol­low through on con­duct­ing back­ground checks of po­ten­tial job can­di­dates. Talk to former em­ploy­ers to ver­ify ex­pe­ri­ence, lengths of em­ploy­ment and rea­sons for leav­ing and con­duct a thor­ough check of any his­tory in­volv­ing un­eth­i­cal be­hav­iour in­clud­ing vi­o­lence, theft and fraud.

Im­ple­ment in­ter­nal con­trols. Shred­ding sen­si­tive ma­te­ri­als and keep­ing track of in­ven­tory is just the start. Long-term mea­sures must be put into place to safe­guard as­sets while re­duc­ing op­por­tu­ni­ties for theft. Three types of con­trols that most com­pa­nies can im­ple­ment in­clude: sep­a­ra­tion of du­ties (no sin­gle em­ployee should be re­spon­si­ble for both record­ing and pro­cess­ing trans­ac­tions); re­stricted ac­cess (only au­tho­rized in­di­vid­u­als have ac­cess to as­sets and ac­count­ing sys­tems); and de­vel­op­ing poli­cies to de­ter­mine how trans­ac­tions are ini­ti­ated, au­tho­rized, recorded and re­viewed.

Ed­u­cate your peo­ple. Nip theft in the bud by ed­u­cat­ing all em­ploy­ees about the long-term ef­fects of theft, how to de­tect fraud and their re­spon­si­bil­ity in reporting it. Make them aware of the pro­ce­dures to re­port in­ci­dents and train them re­gard­ing com­pany poli­cies about steal­ing. This is a vi­tal in­vest­ment of time and re­sources as em­ploy­ees are not only front-line watch­dogs, but also am­bas­sadors of your com­pany and pro­tec­tors of its rep­u­ta­tion.

Do not tol­er­ate small in­dis­cre­tions. Steal­ing starts out as a small ac­tion (in­no­cently “bor­row­ing” some­thing or swip­ing an item or mone­tary amount that might not be missed) and is re­peated, grad­u­ally es­ca­lat­ing un­til it be­comes a habit. On top of this, when a pol­icy is vi­o­lated, en­sure the in­ci­dent or al­le­ga­tion is in­ves­ti­gated im­me­di­ately and thor­oughly. It is crit­i­cal that ev­ery­one in the or­ga­ni­za­tion knows where you stand and fully re­al­izes the con­se­quences of il­licit ac­tiv­i­ties.

Cre­ate a pos­i­tive work environment. Af­ter all of this is said and done, the most im­por­tant way to pro­tect your busi­ness is by cre­at­ing an environment that makes peo­ple feel good, makes them ea­ger to con­trib­ute and makes them want to pre­serve it. Work­place theft has been closely as­so­ci­ated with feel­ings of mis­treat­ment or in­jus­tice by the em­ployer, so en­sure that your peo­ple are sat­is­fied with their work and the com­pany they work for — start­ing with a pol­icy of open com­mu­ni­ca­tion and mu­tual re­spect be­tween man­age­ment and staff.

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— With reporting by Bar­bara Chabai

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